How the Commodities Industry Will Perform in Time Ahead
sun_admin September 26, 2018
The global commodities market is expected to see a completely new scenario in the coming time. While the prices of crude oil and gas are on a surge, agro-based commodities will be witnessing a lowered demand in coming time. A recent report issued by the World Bank has revealed this in light of the prevailing market trends. In this blog post, we will uncover some interesting key findings on this report.
Increased Demand for Energy; Reverse Applicable for Agricultural Commodities
The global growth in demand for agro commodities is expected to witness a steep fall from 2.8% per annum during 2010-2016 to 1.8% during the period 2018-2027. Agricultural prices are expected to go down slightly due to this substantial fall.
Reduced demand for agricultural commodities has been attributed to the changing preferences of global customers who are now willing to prefer foods having high protein content. Energy prices on the other hand will increase considering its increased global demand during 2018-2027. Also, global growth in crude oil consumption is expected to remain steady while that of Natural gas is projected to rise.
If we just consider the past month of August, prices of most commodities declined – be it energy or non-energy commodities. Agriculture prices went down by 1.8 percent; however grains performed better by rising 4.3 percent. Agricultural commodities including grains are though expected to witness price rise of more than 2 percent this year.
The Commodities Market May have a Lot on Offer but Customers are Decision Makers Always
Possibly, there will be changes in agricultural production and policies accordingly with changing customer preferences. The demand for oil seeds, spices, nuts and many other commodities will also fluctuate accordingly based on market demands. As economies mature, infrastructure requirements are met, and GDP growth slows, demand for most commodities may exhibit a slowdown in coming time.